GOP: Emails show IRS staff obsessed with Citizens United

House Republicans investigating the IRS tea party targeting scandal think they’ve established a motive: the Supreme Court’s controversial Citizens United ruling — and, they say, top IRS officials’ attempt to limit its impact.

Former IRS official Lois Lerner and her colleagues mired in the debacle seemed concerned that the 2010 ruling striking caps on corporate political donations would influence the political activities of nonprofits, according to emails in a draft of a new Oversight and Government Reform Republican report, obtained by POLITICO.

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Republicans take it one step further, suggesting the woman who would become the face of the scandal wanted to use the IRS to limit the influence of Republican donors.

Lerner’s lawyer William Taylor III of Zuckerman Spaeder called the accusation “pure fiction.”

Taylor said Lerner’s awareness of Citizens United “shouldn’t be a big surprise to anybody.”

“She was of course over the years involved in discussions of cases like Citizens United and what its implications were for the tax-exempt organizations… That’s what she was supposed to do,” he said.

Lerner, as expected, asserted her Fifth Amendment right to not incriminate herself at a hearing that exploded when Issa abruptly ended the hearing, and cut off the microphone of the panel’s top Democrat, Rep. Elijah Cummings.

The former IRS official took the Fifth in May when the scandal first broke.

House Oversight Chairman Darrell Issa has been the most aggressive among several lawmakers probing the matter, which exploded last year when Lerner first acknowledged the IRS gave added scrutiny to tea party groups, followed by a critical inspector general report.

Issa threatened to hold Lerner in contempt as she repeatedly invoked her constitutional privilege.

Though emails in the report show Lerner and top IRS officials indeed had their eyes on potential abuse of tax-exempt status following the 2010 court ruling, nothing in the report seems to prove that Lerner had interest in protecting Democrats — just enforcing rules.

“My object is not to look for political activity — more to see whether self-declared c4s are really acting like c4s. Then we’ll move on to c5, c6, c7 — it will fill up the work plan forever!” she wrote to her colleagues in a fall 2010 email exchange. That was several months after a group of Cincinnati-based IRS employees first pulled conservative groups applying for tax exemptions for a closer look because of heightened “media attention” surrounding them

The Issa report shows top-level IRS concerns about whether social welfare organizations were following IRS rules. Such nonprofit groups, which don’t have to disclose their donors, are only allowed to use up to 49 percent of their resources for political purposes if they want tax exemptions.

It is a murky standard though and many say a reason why the IRS got itself in such hot water trying to determine political activity.

According to the report, as early as September 2010, Lerner forwarded to her colleagues an EO Tax Journal blog advising the IRS to “keep track of new c4s” and “be more pro-active” about catching groups created solely for political activities. One quote in the story specifically calls out the “educational organizations woven by the fabulously rich Koch Brothers to foster their own financial interest by political means.”

“I’m really thinking we need to do a c4 project next year,” Lerner said in the email.

Later emails showed she wasn’t just talking about ensuring 501(c)4s, called social-welfare groups, were following the rules but also unions and trade groups.

A colleague on the chain, Cheryl Chasin, replied saying the alleged abuse is “definitely happening,” naming at least one group (redacted in the report) she believed was engaging in political activity.